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Published by Sanjeev

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Categories:Types, School Work
Published by: Sanjeev on Dec 23, 2009
Copyright:Attribution Non-commercial


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“A Bank is a financial institution that accepts deposits and channels the money into lending activities.”

Banking is the act of q q Engaging in the business of keeping money for savings and Transacting business with a bank; depositing or withdrawing funds checking accounts or for exchange or for issuing loans and credit etc. or requesting a loan etc. •

Story so far…… •
•The Origin of Bank •Pre and Post Independence Developments •Moving towards the growth – Nationalization, Liberalization, Current scenario

Current Scenario

A Video Clipping

Structure of the Indian Banking Industry

Bank Rate Repo Rate Reverse Repo Rate Cash Reserve Ratio Statutory Liquidity Ratio Lending/Deposit Rate Fixed Deposit Rate Saving Rate

6% 9% 6% 9% 25% 12.75-13.25% 7.5-10.25% 3.5
RBI Bank Rates*
*August 2008 Figures

Why , How does it Help??
•Provides aid in developing the strategic plans of company for current situation •Provides more “Raw material” for extensive internal & External analysis

•Large Customer base, Wider Connectivity •Low service charges •High on Quality assets, Capital adequacy, low cost deposits •Transparency in “Terms and Conditions”

•Excess Non productive assets (npa) •Poor Customers Service like No quick response to quires •Long procedures in availing services like Education loans •Poor marketing and Market survey like poor feedback system

•Responding to emerging Customer needs •Tapping of large rural market •Innovative Transaction methods for capturing more customer base •Core banking solution implementation •Cost Cutting methodologies and Optimizing resource management

•Depreciating Liability asset value •Political factors like “Loan wave off“ decision •Further Liberalization allowing more foreign players to enter from current Percentage share of 10% - 49% •Increasing Maintenance cost •Innovative moves by competitor bank like Replacing of 4 by 6 by 4 method With 8 by 8 method

Why and how does it help?? Political
•Increased FDI in banking sector •Fixed Interest rates to flexible Interest rates •Government diluting the equity in public sector banks •Free trade agreements with other countries •Banks asked to “wave off” farmers loan •BTT has been withdrawn Economic factors •Inflation •Exchange Rates

•Bank rate at 6% Repo rate at 9% SLR at 25% CRR at 9% Prime lending rates 12.75 to 13.5% •Shedding of excessive NPA`s in PSB •GDP crosses trillion dollar mark •Per Capita income rises by 14.3%

•From 464 method to 8 by 8 method •From 75 employees to 1 employee for 2 jobs •Population under 15 in 2005 is 33% of the total population •Population above 65% in 2005 is 5% •Population under 15 in 2015 is estimated to be 28.7% •Population above 65 in 2015 is 5.8% •Population has touched 1 trillion

•Private sector bank pioneered internet banking, Phone banking, ATM, Debit Cards, Credit cards, Mobile banking •Online Personal finance •Finance gains foot holds in networking sites •P2P lending •Bio metric cards and Smart cards

Porter’s 5 Forces Analysis
• • • • • •

- Banking Industry is highly competitive. - Banks trying to lure clients away from competitor banks. - Offering higher finance, preferred rates and investment services. - Leading to experience a low ROA. - In the long run, likely to see more ‘ Consolidations in industry’. (2) THREAT OF NEW ENTRANTS

• • •

- Always a threat of new entrants. - Non Banking financial services companies coming into play and offering various services.

Contd. ………..
(3) POWER OF SUPPLIERS • Always a threat of suppliers of capital to lure away human capital.

(4) POWER OF CUSTOMERS • - Customers have large powers. • - Like the power of switchover.

(5) AVAILABILITY OF SUBSTITUTES • - Plenty of substitutes available. • - Like non banking financial services companies.
• •

•Summary …..

Current scenario

Challenges Ahead Vision 2020

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